DUBAI – The UAE government decision to extend the residence visa period for real estate investors to three years will significantly enhance investor confidence and drive the growth of the country’s property sector, a top official of Emaar Properties said.
“The sector also plays in driving foreign direct investment to the country, and the cabinet decision will enhance the appeal of the UAE as a preferred destination for safe investments in property,” Emaar Chairman Mohamed Alabbar said in an emailed statement to Khaleej Times on Wednesday.
He said the property sector is a key contributor to the non-oil GDP of the country, and is one of the largest employment providers apart from supporting several associated industries.
“The cabinet decision underlines the vision of His Highness Shaikh Khalifa bin Zayed Al Nahyan, UAE President, and His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, to further boost the competitiveness of the UAE,” Alabbar said.
The UAE government on Tuesday announced several steps, including the extension of visa for real estate investors to three years from six months, to accelerate economic growth inline with its strategic plan 2011-2013. The country’s property market was among the biggest casualties of the global economic crisis as the property prices dropped significantly since late 2008.
“We see the new visa law as being an extremely positive step for those who have already purchased property and as an incentive/confirmation to those who have stepped back from purchasing due to the issues surrounding the investor visa and the freedom to reside in any property they may buy,” Elaine Jones, chief executive of Asteco Property Management, told Khaleej Times.
“Whilst the revised law is positive news other market dynamics currently prevailing continue to impede investor sentiment thus demand is likely to remain subdued in the short to medium term although there should definitely be an increase in the level of enquiries and transactions in all emirates. The unrest in parts of the region may well encourage those residents to look for alternative safe and secure location where they will be able to base their families,” Jones added.
In a research note, Citigroup also said the decision could significantly boost demand in Dubai’s residential real estate sector, where the promise of a long-term residency visa was a major driver of second-home purchases during the boom prior to mid-2008. Citigroup said the UAE’s plan to extend visas for foreign homebuyers to three years from six months could lift demand in Dubai’s slumping property market.
“The overall impact on the property market is likely to be somewhat muted by oversupply issues that are being exacerbated by the ongoing completion of new properties,” Citigroup analyst Farouk Soussa said in a note to investors.
On Wednesday, property stocks rose as a result of Tuesday’s announcement. Emaar surged 2.03 per cent to Dh3.02 and Arabtec’s shares gained 2.4 per cent to Dh1.28 on Dubai Financial Market. The Dubai Financial Market Real Estate Index, a measure that includes the shares of five developers, rose 1.5 per cent on Wednesday, its highest close since June 23.
In Abu Dhabi, Aldar Properties, Sorouh Real Estate and RAK Properties advanced that helped gained the real estate index to close at 1,878.51 points, up 1.76 per cent.